Friday, 15 September 2017

What’s next? – USDJPY 15.09.17

The dollar/yen was 0.41 percent higher as of 07:05 GMT on Friday to trade at 110.67, as traders prepared for key economic releases later in the session, while markets weighed new developments in the Korean peninsula.

Kim Jong Un’s government fired a missile late on Thursday that flew over Japan before landing in the sea, two thousand kilometers from Hokkaido, according to media outlets.

The United Nations Security Council (UNSC) will gather on Friday as of 19:00 GMT to again discuss actions against the communist national. The meeting was called by the US and Japan.

The greenback settled downwards on Thursday, erasing gains that followed the release of an upbeat consumer price index as traders remained cautious ahead of today’s economic reports.

According to the US Commerce Department, consumer prices rose by 0.4 percent in August, above expectations for a 0.3 percent increase. The index also surpassed expected values in yearly basis, showing a 1.7 percent growth rate, against an initially estimated 1.6 percent.

The core consumer price index, which excludes volatile components such as food, energy and transport, met analysts’ forecast of a 0.2 percent build.

Good news also came from the Labor Department, with initial jobless claims declining by 14,000 to a seasonally adjusted 284,000. Economists had predicted a build to 300,000 applications.

Strong inflation and jobs data is seen increasing expectations for further monetary policy adjustments later this year. The Federal Reserve holds its next monetary meeting next week.

Fed funds tracked by CME Group’s FedWatch program show that investors are currently pricing in a 41 percent probability of a 25 basis points rate hike by December.

Despite little fluctuations caused by economic reports, market sentiment remained on a high note, with traders cheered by President Donald Trump promising “the biggest Tax Cut & Tax Reform package in the history of our country will soon begin.”

Ahead in the day, investors will keep an eye on US retail sales as of 12:30 GMT, industrial production at 13:15 GMT and consumer sentiment for September as of 14:00 GMT.